The Kanawha County school system won the right in court Wednesday to enter the planned Wolverton Mountain site of the new Bridge/Clendenin consolidated elementary school.
The victory in the eminent domain case may finally open the way to actually building the school. It would replace Clendenin Elementary, which the school system vacated after damage from the June 2016 flood.
But oil and gas companies may fight to be paid millions by the state and federal governments for the property. Eminent domain allows governments to seize private property for public use, but governments must pay those private owners for their loss.
Chuck Smith, the school system’s executive director of facilities planning, said the school system estimates it will only have to pay $25,000 for the property, just south of Clendenin, and the mineral rights (including oil and gas rights) beneath it.
On Wednesday, Kanawha Circuit Court Judge Jennifer Bailey denied an attempt by Cunningham Energy LLC to intervene in the case. Cunningham claimed that the school system taking the property would jeopardize an oil drilling well pad that could produce an estimated $59 million in revenue.
Nick Barth, a Charleston-based attorney for the school system, said “that property has been up there for millennia, no one has ever drilled and produced millions of dollars of oil — I think it’s just kind of more than coincidental that the school board decides to condemn the property, and all of a sudden we have these claims.”
Cunningham could appeal to the state Supreme Court. Bailey also denied its request to stay her ruling until the appeal was done.
Smith said the Federal Emergency Management Agency is expected to reimburse 90 percent of the “reasonable costs” of the property. The state is supposed to fund the rest.
Barth said FEMA’s rules require the school system to buy not just the surface of the land, but the mineral rights beneath it.
The school system filed this eminent domain case last month against Lower Gwynedd, Pennsylvania-based Vesta Oil & Gas Holdings LLC.
Vesta owns half of the surface, and the school system already owns the other half, according to a court filing by Kanawha.
That same document says Cunningham formerly owned the property.
Cunningham attempted to intervene in the case to become an official party that could file its own motions. Company President Ryan Cunningham attended the hearing.
Charleston-based attorney Gerald Titus argued Wednesday that the company had the right to be a party because it’s currently suing Vesta in federal court to get back its mineral leasehold interests both within and beyond the 35-acre site the school system seeks.
And, Titus said, even if that fails, there’s an agreement between Vesta and Cunningham saying that if the school system or anyone else pays above $5 million for the property, part of every dollar above $5 million could go to Cunningham.
So, Titus said, without Cunningham as a party to the case, Vesta could agree that $5 million is sufficient and Cunningham would get nothing.
“There’s very little incentive for Vesta to maximize the [financial] recovery,” Titus said.
Barth, at one point, literally threw his hands up.
“Cunningham has no deed, they have no lease, they have nothing. This is pretty simple we’re entitled to a right of entry — Vesta owns it we need to pay Vesta just compensation,” Barth said, adding that the rest was irrelevant.
He asked Bailey to “deny that motion, grant right of entry, let’s build a school.”
CORRECTION: An earlier version of this story misstated the status of the old Clendenin Elementary building. The school system says it vacated the building but hasn't yet demolished it.